43 comments:

Absolutely, and whether one agrees with dialetical materialism or not, at least one can delve further into the ideas proposed by german philosophy, english political economy, and french socialism (amongst others) when analyzing Marxian economics. In contrast when one sees the neoclassical orthodoxy there is now such emphasis on formalism that (less than curious) students see 'truth' in abstraction without critically considering the source.

And there are so many counter-examples, i.e. Marxists who write incredibly clear prose. E.g., Farjoun and Machover's "Laws of Chaos" is stunningly clear and straightforward, despite grappling with difficult technical ideas. Almost anything written by Allin Cottrel and Paul Cockshott is clear as day. And, lest we forget, it was the Marxist George Orwell who wrote that "good prose is like a window pane".

Oops! And Marx himself, at least in the works he perfected and published while he was alive. Capital Volume 1, excluding the first chapters on the value-form, is amazingly well written, clear, with plenty of entertaining sarcasm directed at the capitalist class. His earlier polemical works, written for workers, are also not in any way obscurantist. The Grundrisse of course, being unfinished notes, is a nightmarish mess. Unfortunately, some Marxists do ape this "dialectical" style, and it's hard to follow.

I'll refer a little anecdote. At the time, I felt quite frustrated, but now I can see the humorous side of it.

While exchanging some emails with a fairly prominent commentator (who will remain anonymous) this guy said that Marx's value theory was false and useless, because it could not explain why he preferred blonde women to redheaded ones...

When I reminded him that women, blonde, redheaded, brown- or black-haired, are not commodities and that Marx spoke of commodities (goods or services produced for exchange in the market in a capitalist economy) the guy insisted that that was not the common usage nowadays and, therefore, Marx's theory was a case of circular reasoning. QED.

Actually Magpie, I recall pointing to advertising a number of times and saying that this added value to commodities without any additional human labour.

I had a long argument with two Marxist economists about this and came up with a great example:

Two pairs of runners are made in the same Chinese factory. The inputs are identical -- including labour time. However, one pair gets a little tick stitched onto it and are seen in magazines being worn by Michael Jordan. The other have a little star stitched onto them and are sold in WalMart.

The pair with the tick are sold for four times as much as the pair with the star.

The Marxist economists couldn't really fault my logic. Without recourse to the idea of false consciousness, or some other moral/metaphysical concept, the labour theory of value can say nothing about any of this.

I will say, though, after reading Joan Robinson, I believe that you can talk about exploitation without an LTV. It is, however, something of a loaded term.

As for Noah Smith, is statement is obviously grossly hypocritical. Anyway, Marxist jargon is not particularly to understand. Especially not that that has to do with economics.

Your argument only works if you consider price the same as value. As, funnily enough, Joan Robinson noted, this is circular logic. We say something's value is reflected by its prices. The only way to measure this is price.

I'm not sure why the LTV wouldn't apply to positional goods. Those two shoes in your example are actually distinct use-values; both cover the feet just as well, but one may signal social status or convey group inclusion while the other may well carry a stigma. In that case, these are really two distinct commodities, despite the similarities in the way they are produced. If demand is high for the shoe-with-tick commodity, and due to intellectual property laws all producers are not free to compete in the production of shoe-with-tick, then less efficient production/pricing standards are free to drive the price above its value.

One might also argue that said value would be higher anyway, since we're not determining SNLT via a market-wide average to produce it so much as a market-wide average to have a particular firm to produce it. (But here I am probably misattributing what is more accurately considered to be a form of rent added to the price tag.)

The classical theory assumes perfect competition. This means that if commodity X becomes more in demand than commodity Y, capitalists are free to shift investment out of Y and into X. Once this shift takes place, we expect that both commodities trade at the cost of production, allowing for payment of profit at the average rate.

The case you cite is covered, in the classical theory, by the concept of rent. In the case you cite, one producer has access to an advantage that allows him profit at above the average rate. This advantage can be viewed as a monopoly grounded either in nature or in law -- i.e., either as Michael Jordan's unique ability to inspire people to buy a specific brand, or as the right to harness Michael Jordan's exclusive endorsement. Marx treats this in part VI of Capital, vol. III, calling the additional revenue a "surplus-profit". He considers the surplus-profit as the employer pocketing a higher rate of surplus value than prevails on average (since the employees are making the wage at which they can reproduce themselves and their families), but acknowledges that the added labor productivity comes from the monopoly of some resource enjoyed by the employer. Hence, he says that the surplus-profit portion of surplus will be transformed into rent (in his examples, for the property owner; in your example, for Michael Jordan, or some combination of people with the right to his endorsement).

If my attempt to present this idea is confusing, I would recommend chapter 2 of David Ricardo's Principles of Political Economy and Taxation, for a neat summary of the idea. You have to think beyond Ricardo's agricultural examples, though, to see how it applies in other cases.

However -- according to Marx -- exchange value cannot be explained by use value. (This is at the very start of his muddled chapter on the commodity). As Marx says, in order to understand exchange value we must have a 'common unit of measurement'. This unit is 'socially necessary human labour time'.

However, in my example exchange value has been added without any substantial increase in labour time. This value is not use value -- as the use value of a commodity is innate and cannot be created. So, it must be something else. Something else is adding exchange value to the shoe that has nothing to do with labour or the 'fruits of nature' (use value).

Now, because I know how Marxists argue (they use slippages in meaning to make metaphysical points), I will simply tie down my point with a quote from Marx himself:

"Use-value as an aspect of the commodity coincides with the physical palpable existence of the commodity. Wheat, for example, is a distinct use-value differing from the use-values of cotton, glass, paper, etc. A use-value has value only in use, and is realized only in the process of consumption. One and the same use-value can be used in various ways. But the extent of its possible application is limited by its existence as an object with distinct properties." (A Contribution to the Critique of Political Economy)

Clearly then. social status does not add to the physical properties of the commodity (which is impossible). So, something else is increasing exchange value here.

@ Will

Your discussion of rent is closer to the truth. But its still a stretch. I'll make a point when I get back in a few hours, I gotta run.

Anyway, I believe the point of this post was that BEFORE claiming authority on Marx, a modicum of commonsense imposes would-be authorities to at least know the basic definition of the terms used by Marx (the author is free to correct me, if I am mistaken on this).

So, let's not waste time with red herrings. Advertising is not the topic of the discussion.

By the way, perhaps you should add to that list "dictatorship of the proletariat".

In my experience, when people mention that term, they have in mind a Latin American dictator (short, stocky, dark hair and glasses, mustache, in uniform), police in riot gear beating protestors and the like.

You cannot just leave advertising out if it doesn't suit the theory -- and anyway, I'm making a broader point here. Read over what I wrote using the Marxist jargon. Advertising adds to exchange value without any additional labour time. This cannot be explained by Marx's theory.

@ Will

Now this is a bit more interesting. I'll admit that, while I was aware of Ricardo's theory of rent, I was not aware that Marx had included it in Vol. III. I would say that this does rather substantial damage to his theory unless we assume that land/property has a relatively constant productivity (the assumption of Ricardo/Malthus) and thus can be ruled out as a variable factor of production.

However, leaving this aside the question here is to how much we can compare the rent on land and the amount of exchange value added by advertising. I would argue that we cannot compare them. Because, in Ricardo, land etc. are treated as givens. They cannot be produced at will. They are scarce.

Advertising value can be created basically at will -- that's what adveritisers do -- and it is as infinite as the ad-man's imagination. While we could call this 'labour' and say that they're adding labour value to the product I think we can all recognise that we're bending the terminology here to make the theory fit.

This gets at a deeper point. Marx and the classicals were materialists in their conception of value. So, when we consider land it is simply a scare physical input we consider it as a material input. It's adds value "objectively" (the chemicals from the soil enter the food etc.).

However, clearly what's going on with advertising is altogether very different. What's happening here is that "subjective" perceptions are being manipulated in order to produce exchange value. This is what Marx would call "idealism" or "idealistic". And yet it affects the exchange value of a given product.

This is, as many many Marxian philosophers have noted (Zizek, Baudrillard, Debord etc.), very problematic not just for the labour theory of value, but for Marx's whole philosophical project. It undermines many of his materialist arguments (that were rather weak anyway).

So, there's something deeper at issue in the LTV. Something that calls into question what exactly is the difference between Marxism and non-Marxian approaches. If you ditch the LTV, I would argue Marxism as philosophy, economics and sociology becomes largely indistinguishable from other approaches. Now, in good hermeneutic fashion, we can bend terminology to make the whole thing fit. We can call advertising 'labour'. We can fudge the theory and equate land rents and monopoly on advertising (but then what about new businesses that figure out a better way to advertise independently...). We can do all sort of things to keep the paradigm intact. But all this will just be language games.

Clearly then. social status does not add to the physical properties of the commodity (which is impossible). So, something else is increasing exchange value here.

This sounds like a fair point, though I don't know that the quote you provided conveys this as distinctly as you claim. "One and the same use-value can be used in various ways" supports my argument if you consider that the shoe-with-star cannot do everything the shoe-with-tick can, despite their similar construction. In fact, only the word "palpable" seems to support your case, but that loses some of its clout when you consider, say, services. If I call a carpet cleaning company to come do its thing, I'm not buying a discrete, palpable good that I can wave around. Software is not a neat fit either - less and less so as we transition from compact disc to clouds.

However, even if we take as given your argument - and I am more than willing to cop to its plausibility - I am still looking forward to your rebuttal of the monopoly rent point we raised (or rather, that Will raised; I only vaguely motioned in that direction).

Oh hey, should have refreshed the page before posting that. Just a quick thing before I have to run:

Marx and the classicals were materialists in their conception of value.

It's a bit more complicated than that; Marx was a materialist, yes, but in his system, what he refers to as "value" is explicitly a social relation, as is the commodity form on the whole. Overlooking this tends to lead to difficulties, such as the "physicalist" conclusions of the Neo-Ricardian school

Try this quote from Das Kapital (I'm being lazy and pulling these off Wiki):

"The utility of a thing makes it a use value. But this utility is not a thing of air. Being limited by the physical properties of the commodity, it has no existence apart from that commodity. A commodity, such as iron, corn, or a diamond, is therefore, so far as it is a material thing, a use value, something useful. This property of a commodity is independent of the amount of labour required to appropriate its useful qualities. When treating of use value, we always assume to be dealing with definite quantities, such as dozens of watches, yards of linen, or tons of iron."

Just to emphasize:

"Being limited by the physical properties of the commodity, it has no existence apart from that commodity."

So, yeah, use value has nothing to do with exchange value. It is similar to the value given by, say, soil (which ties into the point I made in response to Will).

As for value being a social relation. Yes, Marx did think this. But recall that for him all social relations were based on material relations. So, material relation (labour and production) for him generate social relations (value etc.). I think Marx was flagrantly wrong on this basic point. And it spoils his otherwise quite good economics.

"Being limited by the physical properties of the commodity, it has no existence apart from that commodity."

Again, this just strikes me as saying that the usefulness of a thing does not have independent existence apart from the discrete object in which it is embodied - sort of a nominalist statement, really. It doesn't mean that two garments of near-identical construction can't have different utility and it doesn't mean that status is never an object of utility. However, it does mean that you can't somehow detach said utility from its material form; when the expensive handbag is destroyed, you've lost both its carrying capacity and its ability to signal. That's what I'm getting from the above.

Advertising adds to exchange value without any additional labour time. This cannot be explained by Marx's theory.

Value as labor time is not the same thing as exchange value, though (even though they are assumed the same in volume 1); that is why things can be said to exchange "above" or "below their values." Accordingly, advertising doesn't increase value; all advertising does is increase demand for a product, and the LTV most assuredly does assign demand a role in setting market prices - albeit not exactly the same role as in subjective theories. In this case, it's about setting the lower bound on production efficiency.

Brendan Cooney over at Kapitalism101 recently provided an accessible rundown of the role of supply and demand in Marxian economics that explains this point well.

So, material relation (labour and production) for him generate social relations (value etc.). I think Marx was flagrantly wrong on this basic point.

This seems like the sort of thing that would beg a really lengthy discussion. Rather than ask you to clarify this here, I will instead ask if you can perhaps point to something you've written or read that details your perspective on this matter?

Be careful here. You must read it in context. Marx's style allows meaning to flow from one sentence to another. You say:

"...this just strikes me as saying that the usefulness of a thing does not have independent existence apart from the discrete object in which it is embodied "

But Marx begins that paragraph by saying:

"The utility of a thing makes it a use value."

So, when Marx refers to use value he is talking about the utility of a thing. And when referring to where this utility arises from he says that it is:

"...limited by the physical properties of the commodity, it has no existence apart from that commodity."

Read that last sentence carefully. Very carefully. The use value is "LIMITED BY THE PHYSICAL PROPERTIES" and "HAS NO EXISTENCE APART FROM THE COMMODITY".

Now, advertising -- if it is all about status, which I believe is a crass oversimplification of how advertising works -- but if we say that it is, still advertising adds SOMETHING MORE to the commodity. This is enormously important because it means that exchange value can arise without adding "physical properties" to a commodity (through labour etc.).

"Value as labor time is not the same thing as exchange value, though (even though they are assumed the same in volume 1); that is why things can be said to exchange "above" or "below their values."

This has already turned into a language game/hermeneutic reading and I'll soon lose interest (these sorts of exercises are theological in the worst sense of the word), but I will simply make the point that for Marx:

1. market values are exchange values.

2. exchange values are set by the amount of SNLT embodied.

Now, you're talking about demand (which is NOT a Marxist term, it is neoclassical and you shouldn't mix the two as it shows a bad understanding of Marx). But this is irrelevant. Supply and demand mean nothing in his system. Market values are set by exchange values which are set by SNLT. Nothing more. Nothing less.

If you want to start talking about supply and demand, I'll accommodate. I think they're better analytical terms than 'exchange value' etc. But we are no longer talking about Marx. We are talking about some person with neoclassical leanings' interpretation of Marx. Altogether different.

Also, in purely supply/demand terms it is by no means clear that advertising is simply an artificial demand simulation technique. I would argue that it creates a new product. Think of it this way: if Apple create a new iPod are they just stimulating more demand for the old iPod or are they bringing a new product to market? The latter, of course. And the same is being done (as you admitted) when the tick is stitched on the side and Jordan sports a pair. In fact, in saying that you admitted that advertising is not demand side at all. But again, these analytical terms are irrelevant to Marx.

"...you can perhaps point to something you've written or read that details your perspective on this matter?"

Sorry, on this: I don't write about Marx or Marxism. I rarely encounter them in contemporary discourse so I don't bother -- although, in many ways its more interesting than, for example, the Austrians. But there have been plenty of critiques of this worldview before from Marxian authors. Pierre Bourdieu is quite good if I recall. Maybe David Graeber's book on value -- which I have only scanned (and he maintains an LTV on 'moral grounds' which I find rather weak).

Read that last sentence carefully. Very carefully. The use value is "LIMITED BY THE PHYSICAL PROPERTIES" and "HAS NO EXISTENCE APART FROM THE COMMODITY".

But I never suggested utility has an existence apart from the commodity. Quite the contrary.

I think my very careful reading is working out differently than yours, though; from your takeaway, it's almost as though you are interpreting "limited by" to mean "limited to." But you quoted earlier where he notes that the same use-value can be used in various ways. So the chemical existence of the thing is not enough to imply any particular "normal" use for it; gold can be a use-value because it's heavy, because it can be flattened to atomic thinness for alpha particle experiments, or because other people find it pretty. All of these are valid expressions of the utility embodied in it, and therefore gold's status as a use-value.

I don't see why positing that something has social utility would imply some sort of metaphysical claim that the Idea of utility has independent existence. I guess that's where you keep losing me.

Now, advertising -- if it is all about status, which I believe is a crass oversimplification of how advertising works -- but if we say that it is, still advertising adds SOMETHING MORE to the commodity. This is enormously important because it means that exchange value can arise without adding "physical properties" to a commodity (through labour etc.).

I apologize if I was unclear; this is not what I meant, but I will go into the specifics below.

"Value as labor time is not the same thing as exchange value, though (even though they are assumed the same in volume 1); that is why things can be said to exchange "above" or "below their values."

This has already turned into a language game/hermeneutic reading and I'll soon lose interest (these sorts of exercises are theological in the worst sense of the word), but I will simply make the point that for Marx:

1. market values are exchange values.

2. exchange values are set by the amount of SNLT embodied.

What? There is no equivocation, here. I don't see a language game, unless one of us is misreading the other. (I hope it is not me, but I am not closed to the possibility.)

Marx uses this phrasing of "above/below value" constantly, and he is explicit in saying that the market price of things can, for all intents and purposes, always be assumed to be higher or lower than their value. This is not something I've dreamt up to make a semantic point; this is actually a crucial distinction that he makes throughout his work.

SNLT is, if anything, more like a center of gravity around which prices are in constant flux due to forces such as supply and demand, changes to production and the relation between capital and labor, and a great many others. The point of the LTV is not to be a theory of price in and of itself (though it can make sense of prices in broader context), but rather to describe the laws of motion of a capitalist economy. To discard the deviation of price from value does away with the lion's share of said motion.

"But I never suggested utility has an existence apart from the commodity. Quite the contrary."

"So the chemical existence of the thing is not enough to imply any particular "normal" use for it; gold can be a use-value because it's heavy, because it can be flattened to atomic thinness for alpha particle experiments, or because other people find it pretty."

These statements appear to me in contradiction.

On the one hand you say that utility has no existence apart from the commodity. But then you say that utility may exist because someone "finds it pretty".

This is a contradiction on my reading -- which is a Marxist reading, by the way. If I can imbue an object with different utility than you because I find it pretty and you find it ugly, then the utility DOES exist apart from the object. The utility exists within my mind and within your mind and not in some 'external', 'material' world.

In Marxist/Hegelian terms, if utility exists independent of the subject (i.e. you, me) we can consider it a property of the object (i.e. the commodity) -- which is what Marx is aiming for. However, if utility exists on the side of the subject we cannot assume that this utility exists in the material object.

This is contrary to Marx's entire philosophical project and at odds with his economic analysis.

================

"SNLT is, if anything, more like a center of gravity around which prices are in constant flux due to forces such as supply and demand, changes to production and the relation between capital and labor, and a great many others."

Yes, that's right. Supply/demand are irrelevant to Marx because he is looking for the "underlying laws of economic motion". All supply/demand fluctuations are just transitory effects that will settle around the exchange value of the object which depends on its SNLT.

Here's the problem: The Jordan runners aren't imbued with a temporary increase in demand. The commodity itself is completely changed. It becomes something new that people are more willing to exchange more other products for.

It is not that more people demand it (although they may) and that there is a limited supply (there probably isn't). But that those who do demand the runners value them higher than other runners even though the underlying SNLT is the same. The product has changed -- not the people. A new factor has gone into production that has increased the value of the product without needing (a) more expensive inputs or (b) more labour time.

No, you are not making a broader point here. You are creating a distraction, to try and cover your mistake.

It works like this: one is caught red-handed saying something silly. A simple solution is to say: "Geez, sorry. I didn't know that". And that's it. People do make mistakes, after all and this is a mistake lots of people make, as Robert's post suggests. So, you are not alone.

But that solution, for some reason that only you know, is unthinkable to you. What's the away around? Let's point somewhere else, insisting "I am making a broader point".

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For the record: your very insistence on this advertising red herring is another case where a little previous research would have saved you a hard time, for yours is not a red-hot discovery. This has been the subject of discussion among Marxists since at least the 1960s.

Referring to the "broader" subject of marketing, this EXPOSITION paper (which you could had have easily found by the simple expedient of making a Google search) contains this paragraph, which is short and understandable enough:

"Our goal in what follows is to provide a broad introductory sketch of the sales effort under monopoly capital (and more specifically the monopoly-finance capital of today) based on what we believe to be the most comprehensive foundational work on contemporary advertising: Paul Baran and Paul Sweezy's Monopoly Capital. It built upon the pioneering economic scholarship on this subject in the middle third of the twentieth century." [1]

This other paragraph, from another paper (which you can also find using Google), in a short couple of lines, gives the basic idea:

"This analysis was accomplished first by Veblen, and then-in a synthesis of Marx and Veblen-in Baran and Sweezy's Monopoly Capital in 1966." [2]

Now, Captain Ahab, you are free to go on your obsessive crusade against the Red Whale, that's fine with me. But beware, that whale has been defeating other intrepid hunters since it was born, in the 19th century.

In the classical schema, value is strictly a long-term phenomenon. Prices are assumed to deviate from values almost all the time, but still to gravitate around them. Use value and exchange value are seen as a dichotomy at the moment of purchase, but over time the one must influence the other. If the excess return on the tick shoe does not reflect monopolization of some exclusive resource, then lower-cost knock-offs or counterfeits will appear, bringing the price down. If advertising represents an addition that can be added "basically at will," then the classical theory predicts that competitors will employ similar advertising until the value of that, too, is reduced to cost of production.

I'd note again that this assumes a freedom of competition that no classical author thought actually existed. The same authors clearly were aware of guilds, legal monopolies, tariffs, etc., but bracketed them out (as Ricardo for instance brackets out rent once he has isolated it). Marx in particular seems to have intended to allow capitalism the best assumptions that its apologists asked for.

I'm not going to respond to you in any detail if you take such a vindictive tone. But I will say that the work you reference is generally incoherent and wooly on the points that I raise. I'm aware of the 60s Marxist work. I'm also aware, which you're apparently not, of the post-structuralist and neo-structuralist critiques which won the debate in the philosophy departments.

===============

@ Will

I don't think what you're saying addresses the point. The fact is that exchange value has been added permanently to a product with extra SNLT. Okay, knock-offs will be produced, but these will have a lower exchange value. And maybe other firms will match advertisements, but that doesn't matter.

If Mike Jordan wears the Nikes and Adidas hires David Beckham to wear their shoes, then the Nikes and the Adidas might be roughly at par exchange value. HOWEVER, relative to all other commodities -- which is the real measure -- BOTH the Nikes and the Adidas will have a higher exchange value.

You see we're talking about actual value being added here. It's the same as if Puma then made much higher quality shoes through higher labour inputs AND advertised and these had a higher exchange value than the Nikes and the Adidas. You simply cannot get around the fact that exchange value is being added by the advertising and this additional value does not arise from SNLT.

"I'm not going to respond to you in any detail if you take such a vindictive tone."

Okay, so that I don't sound "vindictive": pretty please, with sugar on top, quotations about the "post-structuralist and neo-structuralist critiques which won the debate in the philosophy departments", because indeed I am not aware of their alleged existence (see, it's not that hard to acknowledge a fault).

Or, even better, explain them in your own words: grab your scissors and shear the wool away. Deliver the killer KO!

I'll add some flowers and rainbow drawings, but I don't know how, so a face will have to do: :-)

@Phil: thanks for your patience. Without further ado, the missing part 2 and more:

Now, you're talking about demand (which is NOT a Marxist term, it is neoclassical and you shouldn't mix the two as it shows a bad understanding of Marx). But this is irrelevant. Supply and demand mean nothing in his system. Market values are set by exchange values which are set by SNLT. Nothing more. Nothing less.

This is incorrect, and almost aggressively so. If you're going to impugn my understanding of the subject matter, it is best not to include an error in the same sentence. Yes, supply and demand are not strictly Marxian terms as such; they were in fact used by the very classicals he studied. He understood the concepts well and utilized them. However, they don't tell the whole story; labor values come into play because once supply "covers" demand, it no longer tells us anything about relative exchange values. This is because prices are not simply scarcity indices. If they were, the cambridge capital controversy would have been a lot less damning. I would once again urge a look at the Cooney post I mentioned earlier that quite simply describes the interplay of supply, demand, and SNLT. It seems like it'd be worth your time to take a look if you plan to continue throwing around sweeping and egregiously incorrect assertions like "supply and demand mean nothing in his system."

Also, in purely supply/demand terms it is by no means clear that advertising is simply an artificial demand simulation technique. I would argue that it creates a new product. Think of it this way: if Apple create a new iPod are they just stimulating more demand for the old iPod or are they bringing a new product to market? The latter, of course. And the same is being done (as you admitted) when the tick is stitched on the side and Jordan sports a pair. In fact, in saying that you admitted that advertising is not demand side at all. But again, these analytical terms are irrelevant to Marx.

I suspect we may mean two different things by "advertising." I mean things like television commercials, internet and magazine ads, billboards, etc. I am not even sure how creating a new iPod could be construed as an advertisement for the old iPod; rather, at the risk of being tautological, it is the advertisements for the iPod that constitute advertising.

Whether the two sneakers are different use-values is aside from the question of whether or not it would be advertising if MJ rocked them around town (it almost certainly would be, incidentally). In that case, it is entirely likely that people would see the ad and perhaps more people would relate to the product and therefore want to buy it. Thus, demand rises. This can cause price to rise. This is fully compatible with the LTV.

"But I never suggested utility has an existence apart from the commodity. Quite the contrary."

"So the chemical existence of the thing is not enough to imply any particular "normal" use for it; gold can be a use-value because it's heavy, because it can be flattened to atomic thinness for alpha particle experiments, or because other people find it pretty."

These statements appear to me in contradiction.

On the one hand you say that utility has no existence apart from the commodity. But then you say that utility may exist because someone "finds it pretty".

Okay, let me try a different approach to illustrate why they are not contradictory. Here is a yellow flower (please bear with me, I am totally holding one up). This flower possesses the property of appearing yellow, and therefore we can say it IS yellow. By saying this, I am not AT ALL suggesting that there is a Platonic Idea of Yellowness that has independent existence as a universal. Candy can be yellow, a star can be yellow, etc, but there is no such thing as Yellowness that we can point to in the universe. We would at best be pointing out things that are but expressing this quality.

Similarly, while the utility of a commodity can be expressed in a number of ways, that utility still remains intrinsically tied to, and expressed as a quality of, the commodity in question. If the commodity vanishes from existence, so too does its utility. So whether you derive your particular utility from gold from particle physics or from adorning yourself with things that will cause others to think more highly of you, it is still ultimately limited in its capacity to satisfy you by its material existence. That utility can't be separated from it, like a soul ripped from a muppet in The Dark Crystal or whatever.

See what I'm saying? This does not at all violate the materialist underpinnings of the theory, but is in fact based entirely upon it. Like I said, it can also be read as a nominalist position.

The utility exists within my mind and within your mind and not in some 'external', 'material' world.

The satisfaction exists within our minds, sure, but the actual uses are material; we just recognize them. However we choose to use them, the only thing that matters to the study of political economy is that we can, and that we are thus willing to trade money for it. As Marx said early on in Capital, "to discover the various uses of things is the work of history."

I don't think what you're saying addresses the point. The fact is that exchange value has been added permanently to a product with extra SNLT. Okay, knock-offs will be produced, but these will have a lower exchange value. And maybe other firms will match advertisements, but that doesn't matter.

Again, I think the problem is that you are viewing "exchange value" as the same thing as "value." They are actually two different things, though as I said, they are assumed numerically equivalent in Vol. 1. Exchange value is a ratio at which a commodity will exchange for another commodity, most often used in the particular expression of "price." "Value," without use- or exchange-, is what defines the commodity form and is expressed in terms of SNLT. Exchange value is an expression of value, but not exclusively so.

If something is selling at its value, you can treat value and exchange value as interchangeable because the latter is exchanging for money, which is the form of value and thus an expression of labor time.

The increase in exchange value can be explained by demand and by monopoly rents. Value (SNLT) is unchanged. The shoes sell above their value. Profit is high. See? It's all extremely reasonable. It's just a pain to wade through all the misapprehensions.

In short, in the classical system, values and prices deviate habitually and unremarkably. It might be less confusing if we used Adam Smith's less-loaded terms, "market price" and "natural price," instead. Holding up two commodities and pointing out that you have an instance of price deviating from value is not really a fatal blow.

And my understanding is that the classical argument, prior to Marx, does not necessarily have anything to do with materialism. The motivation is an objective accounting tool, that one can use both to predict prices and to distinguish changes in the value of goods from changes in the price level.

"So whether you derive your particular utility from gold from particle physics or from adorning yourself with things that will cause others to think more highly of you, it is still ultimately limited in its capacity to satisfy you by its material existence."

Absolutely not. It is completely unlimited. It's uses are based on the evolution of social and cultural norms. So, the tribesman might think that the gold is a mystical item that has immense value due to his mythic system. He will imbue it with symbolic value. Similarly, if P-Diddy starts wearing gold chains instead of silver ones, the metal might rise in exchange value for a particular group relative to all other commodities.

Once you admit that value is subjective -- as you have -- that's the end of Marx's theory of the commodity. Because symbolic and subjective value are completely infinite in their capacity, subject to constant changes as culture and discourse evolve. People who are in symbolic positions (Mike Jordan) can manipulate the values by influencing opinions in an infinite number of ways. The value of the commodity is thus completely separate from both its material existence and its processes of production.

(P.S. This has nothing to do with idealism in the Platonic sense, but rather in the Hegelian sense insofar as how Man relates to objects and how these objects relate to him. That is, this has to do with subject-object dialectics. I'm surprised you are not familiar with this distinction. It's at the heart of all Marx's work.)

"Exchange value is a ratio at which a commodity will exchange for another commodity, most often used in the particular expression of "price." "Value," without use- or exchange-, is what defines the commodity form and is expressed in terms of SNLT."

If what you are saying is true then 'value' as you understand it is a tautological term. Because 'value = SNLT' on the basis that you/Marx says it does and for no other reason. This means that Marxism is based on a tautological statement and cannot be distinguished from a metaphysical system.

I.e. It is not a useful analytical system. It is simply a tautological system that makes unprovable assumptions.

Personally, I think Marx was more consistent than that and I don't think he made such tautological statements. But on your reading he does.

Absolutely not. It is completely unlimited. It's uses are based on the evolution of social and cultural norms. So, the tribesman might think that the gold is a mystical item that has immense value due to his mythic system. He will imbue it with symbolic value. Similarly, if P-Diddy starts wearing gold chains instead of silver ones, the metal might rise in exchange value for a particular group relative to all other commodities.

You did not read what I said closely. A thing's uses can be unlimited, yes, but it is still limited in its very capacity to BE used by its material existence. That gold you own, you can invent a new use for it every day from now until you die, but if you no longer have it, you cannot continue to use it. This is elementary, and perhaps deceptively simple. You cannot spend your money twice and you cannot use things you don't have. If you will continue to deny this, then let me ask you, because I am dying to know: would you characterize the experience of riding that trained pterodactyl as more "fun" or "scary"? (I know you don't have one, but why should that stop you from riding it?)

The "evolution of social and cultural norms" is, again, the realm of history and not political economy. The tribesman, P-Diddy, et al - it doesn't matter why they subjectively desire it. But the fact that they do desire it enough to pay for it tells you something basic: in order to get whatever use they think they can get out of that gold, they need to have that gold.

Once more, with feeling: for the sake of the theory, it's not important WHAT use people recognize for a thing; only THAT people have recognized a use for it.

If what you are saying is true then 'value' as you understand it is a tautological term. Because 'value = SNLT' on the basis that you/Marx says it does and for no other reason. This means that Marxism is based on a tautological statement and cannot be distinguished from a metaphysical system.

Hoo boy. It is a definition within this particular analytical system. You need definite terms to have theories. It's as simple as that.

Perhaps this whole disagreement is just a problem of definitions, since you appear to be using 'value' in the modern sense of meaning 'subjective utility' (a tautology!!!) and I am using it in Marx's sense. If I were trying to cross my definitions, and suggest that the utility of a thing is based on the amount of abstract labor time embodied in it, and the reason for this is that value equals abstract labor time, then you'd be absolutely correct; I would have committed a fallacy.

To spare future confusion, I will refrain from using the word "value" further. From this point on, when I am speaking of subjective valuation, I will say "utility"; when I am speaking of objective valuation I will say SNLT.

And just like that, the "tautology" dissolves, since now you can plainly see that I am saying that prices revolve around SNLT, rather than the thoroughly adulterated v-word. So let's continue on these terms. What do you say?

(P.S. This has nothing to do with idealism in the Platonic sense, but rather in the Hegelian sense insofar as how Man relates to objects and how these objects relate to him. That is, this has to do with subject-object dialectics. I'm surprised you are not familiar with this distinction. It's at the heart of all Marx's work.)

I was drawing an analogy to help you understand my point about what "limits" were being referenced vis-a-vis a commodity's material form. Yes, I am familiar with the distinction you are referencing. Yes, I am growing impatient with your continued ad hominem focus; please stop trying to draw conclusions about me personally.

Instead, keep your attention fixed on the things I am actually saying, so I won't have to keep repeating and rephrasing arguments in the hopes that you will represent them accurately.

Given my slowness in commenting, I was first glad to see a long conversation without my involvement. I lean more against Philip's side. By the way, I like Philip's post on the weirdness of academic economics of a couple of week's ago.

For what it's worth, I actually wear Air Jordans - they are high-tops and easier to find than many other brands, and I am not tightly constrained in my budget. I have available an essay and a FAQ on the Labor Theory of Value,dating from before I started my blog.

I find that in the literature on Marx, scholars I respect, and who write clearly, can drastically disagree with their interpretations. Marx wrote such a lot that one can almost always find another apposite quote in many arguments. I like this one from the Grundrisse:

"...the object is not an object in general, but a specific object which must be consumed in a specific manner, to be mediated in its turn by production itself. Hunger is hunger, but the hunger gratified by cooked meat eaten with a knife and fork is a different hunger from that which bolts down raw meat with the aid of hand, nail and tooth. Production thus produces not only the object but also the manner of consumption, not only objectively but also subjectively. Production thus creates the consumer. (3) Production not only supplies a material for the need, but it also supplies a need for the material. As soon as consumption emerges from its initial state of natural crudity and immediacy – and, if it remained at that stage, this would be because production itself had been arrested there – it becomes itself mediated as a drive by the object. The need which consumption feels for the object is created by the perception of it. The object of art – like every other product – creates a public which is sensitive to art and enjoys beauty. Production thus not only creates an object for the subject, but also a subject for the object. Thus production produces consumption (1) by creating the material for it; (2) by determining the manner of consumption; and (3) by creating the products, initially posited by it as objects, in the form of a need felt by the consumer. It thus produces the object of consumption, the manner of consumption and the motive of consumption. Consumption likewise produces the producer's inclination by beckoning to him as an aim-determining need."

And further:

"On the other side, production produces consumption by creating the specific manner of consumption; and, further, by creating the stimulus of consumption, the ability to consume, as a need. This last identity, as determined under (3), (is) frequently cited in economics in the relation of demand and supply, of objects and needs, of socially created and natural needs."

"Those two shoes in your example are actually distinct use-values; both cover the feet just as well, but one may signal social status or convey group inclusion while the other may well carry a stigma. In that case, these are really two distinct commodities, despite the similarities in the way they are produced".

Blah blah blah blah

July 11, 2012 11:37 AM Philip Pilkington said...

"Also, in purely supply/demand terms it is by no means clear that advertising is simply an artificial demand simulation technique. I would argue that it creates a new product. Think of it this way: if Apple create a new iPod are they just stimulating more demand for the old iPod or are they bringing a new product to market? The latter, of course."

Hello, Marx tried to develop an economic theory for the proletariat, because such a theory would be supported by the majority. Some parts (for instance the class consciousness) are in fact sociology or philosophy, and subjective by nature. But the Marxian theory is definitely versatile for the description of dynamic economic systems with technological progress. Although Marx wanted to improve the economic science, he probably did not intend to develop a new vocabulary. On the other hand, the bolshevist rulers wanted to use science for purely ideological reasons. They wanted to thwart the communication between the two power blocks. For them, the introduction of alternative expressions was a means to distinguish themselves. Unfortunately Marx is often held accountable for the fantasies of Uljanov and his successors.

To clarify a few points:To Marx, value in use is an objective quality (it belongs to the object) and is incomparable between commodity and commodity (how could you compare the chemistry properties of gold to the ones of copper?)However, value in exchange is a different issue, as a commodity carries a metaphysical condition against another (one expresses its value on another) and therefore, something in common to both commodities must be compared/exchanged. This is labour, common in every commodity.However, value in exchange is not a relation between objects (qualities) but a social relation between two persons. Therefore, value in exchange only reflects SNALT in a society with twice free workers (free from slavery and free from the means of production) in isolated and deprived jobs between themselves (which means that each worker needs to sell his labour force in order to have income as the capitalists own the means of production).

All that said, I think that nothing above has anything to do with the advertising/Jordan discussion. To me Philip Pilkington is wrong on the outside, but his insights carry some problematic criticism in LVT.First, SNALT si not the "current relative price" of commodities, but (should be) the long period position of relative prices (normal prices of production, natural prices), and the current relative prices gravitate constantly towards this relations of labour value.Now, which are the mechanisms (shocks) that put prices above or below these values and which mechanisms make prices come back to values? Well, in some cases, demand is the shock: if more commodities are demanded than the ones that were produced in that year, prices will go up. Other factors could be problems in the harvest and so on. But these shocks in the long run are meaningless. Why? Because of competition. If prices go up, profit rates go up also (effective profit rates higher than normal, or an overrealisation of profits) and then the capitalists that produce that commodity will tend to produce more. Also, other capitalists from other branches of production will change to that commodity to have some of those profits. Competition then will lower relative prices towards the normal prices of production.What happens in an advertising world? We live in an imperfect competition world, with monopolistic competition. That Jordan sneaker is not a normal sneaker, because no-one else can produce it, as Jordan must have signed an exclusive contract with the firm. Then, other firms cannot produce this Jordan sneaker to compete with that firm. It's true, in this case relative prices (even in the long run) are different from values, but this happens because the competition mechanism don't apply.Now this is serious. You create a theory of value that only applies in the "perfect competition case", which is a very restrictive (and neoclassic) case.Also, you should notice, (and Vienneau may know this better than I do) that in Marx's resolution of the system (dividing all profits equally between different branches of capital, so as to solve the ricardian problem of techniqque choice), Marx's solution cannot equalize labour quantities with normal prices of production. But this is just a math problem.

"There are some commodities, the value of which is determined by their scarcity alone. No labour can increase the quantity of such goods, and therefore their value cannot be lowered by an increased supply. Some rare statues and pictures, scarce books and coins, wines of a peculiar quality, which can be made only from grapes grown on a particular soil, of which there is a very limited quantity, are all of this description. Their value is wholly independent of the quantity of labour originally necessary to produce them, and varies with the varying wealth and inclinations of those who are desirous to possess them.1.6

These commodities, however, form a very small part of the mass of commodities daily exchanged in the market. By far the greatest part of those goods which are the objects of desire, are procured by labour; and they may be multiplied, not in one country alone, but in many, almost without any assignable limit, if we are disposed to bestow the labour necessary to obtain them."

Focusing on values that are scarce is evidently There are some commodities, the value of which is determined by their scarcity alone. No labour can increase the quantity of such goods, and therefore their value cannot be lowered by an increased supply. Some rare statues and pictures, scarce books and coins, wines of a peculiar quality, which can be made only from grapes grown on a particular soil, of which there is a very limited quantity, are all of this description. Their value is wholly independent of the quantity of labour originally necessary to produce them, and varies with the varying wealth and inclinations of those who are desirous to possess them.1.6

These commodities, however, form a very small part of the mass of commodities daily exchanged in the market. By far the greatest part of those goods which are the objects of desire, are procured by labour; and they may be multiplied, not in one country alone, but in many, almost without any assignable limit, if we are disposed to bestow the labour necessary to obtain them."

Focusing on values than are obtained by scarcity is evidently not applicable under this mode of analysis. The attempt to do so does not disprove the Law of Value.

And, from where I am standing, taken together they answer the challenge. Incidentally, although "generally incoherent and wooly" (!), this is basically what Baran and Sweezy said.

The detail you are missing is that this is a very peculiar discussion.

Note my previous comment: after one day of unpleasant, unproductive and lengthy discussion, full of patronizing, gratuitous, unsupported assertions (many of them, simply utterly mistaken, as Pilkington's "neoclassical demand and Marx" remark), Pilkington arrived at the very same statement he dismissed when A advanced it! The same!

Ask yourself this: why did this happen? Now, think of the subject of Viennau's post. It goes a long way into explaining this (although, in honesty, I feel there is more at play here, but that's only a guess).

More importantly: if people has already shown this stubborn negative to understand and acknowledge errors, what use is it to discuss rationally anything with them?

Of course, you are free to feel differently. In any case, I wish you good luck. As Han Solo said: "You're gonna need it".

"then let me ask you, because I am dying to know: would you characterize the experience of riding that trained pterodactyl as more "fun" or "scary"? (I know you don't have one, but why should that stop you from riding it?)"

I have to hold my ribs in or they will fall out from laughing so hard at this brilliantly funny image...